Do employees have the right to make mistakes?

A culture of caution is a barrier to agility and innovation, says Dr Simon Hayward

Is your organisation risk-averse? Experimentation, failure without fear and celebrating learning from failure are all key to building a risk-agreeable culture. However, risk and failure profoundly challenge us as human beings. Overcoming a culture of caution is a major challenge for many business leaders. 

When speaking to CEOs, most highlight an aversion to risk as a barrier to becoming more agile. A culture of caution can inhibit progress.

Building high levels of trust where people feel safe to experiment and take risks is not easy. It does not appear by chance. It takes effort and time to give people the confidence to trust that even when the results of their actions are seriously problematic, they will be treated fairly and with the confidence that they were motivated to do the right thing. In this digital era we are often working with people virtually and may never actually meet them in person. Building trust in this virtual world can be particularly challenging, and yet is more important than ever. 

A culture of caution can also be a particular issue in heavily regulated industries, where conformity can reduce the risk appetite of managers. This fear of failure and its consequences is a leadership issue. It inhibits experimentation and risk-taking, and it slows down innovation and improvement. Fear can lead to the avoidance of risk. Decision-making is slowed down when people seek higher approval to cover their backs. The lack of trust and resulting lack of progress can be frustrating for many. 

Agility requires that colleagues are allowed to adapt to changing circumstances, to share what they learn and to operate in a culture that supports experimentation without blame. They can ‘fail fast and learn’ as a driver of innovation and pace. Free movement of knowledge facilitates innovation and improvement.

Many innovative organisations have processes that enable people to ‘fail fast and learn’. Experimentation is encouraged, and new ideas are tested in small ways. If the idea doesn’t work out, the organisation learns from it and applies that learning to the next iteration or project. An important element in doing this is not to over-burden these experiments with too many rules. By experimenting in a contained way, potential risks are more manageable. 

For example, the ‘fail fast and learn’ principle is increasingly important to Three UK as the company develops and becomes more complex. CEO Dave Dyson has said: “Our desire to achieve more places demands on everyone’s time. Although we are constantly increasing our capability, there are always going to be more things to do than we can actually service. If something isn’t working or doesn’t look like it’s going to work, then the sooner we can make the decision to stop investing in that activity and start investing in an alternative activity, the better we will be as an organisation.”

This willingness to swiftly reallocate time and resource is at the very heart of agile working. In our increasingly unpredictable and complex world, leaders must assess and continually react to new opportunities and challenges. They need to implement strategies rapidly and refocus efforts when circumstances change.

When presented with key moments of choice, agility enables leaders to move quickly and responsively. It helps drive learning and innovation and enables teams and organisations to flourish without fear.

Dr Simon Hayward is CEO of Cirrus and author of The Agile Leader. He tweets at @simonjhayward